UK bakery, sugar and ingredients firm The Real Good Food Co. has forecast a drop in profit this year as its sugar and bakery divisions suffer losses.
The group said it expects that its results for the year to 31 December to show a profit before taxation of around GBP0.5m (US$0.7m).
CEO Stephen Heslop said that with reduced sales in the company’s Napier Brown Foods sugar division, he expects revenues to be 7-9% behind last year.
“We have seen a continued deterioration in the economic climate in the UK,” Heslop said. “These conditions have affected all of our trading divisions to varying degrees.
The company’s bakery division, Haydens Bakeries, incurred one-off costs in developing new foodservice lines and sales to two principal retail customers continue to reflect reduced trading, the company noted.
Full-year figures will include a fair value charge of GBP0.4m to reflect a number of interest rate swaps due to the recent falls in Libor.
“The economic outlook for 2009 remains uncertain and the competitive pricing in retail is expected to continue. However, we have already seen a recovery in industrial sugar margins in the last quarter of 2008 and expect them to continue during 2009,” Heslop added.
As part of a series of cost reduction initiatives, the group said it is relocating its London head office functions to its Liverpool manufacturing site.